U.S. Markets closed

Johnson Controls reports strong organic revenue and earnings growth in fiscal Q2; Closes sale of Power Solutions business and increases fiscal 2019 guidance

- GAAP EPS from continuing operations of $0.26 per share, including special items

- Adjusted EPS from continuing operations of $0.32, up 23% versus prior year

- Sales of $5.8 billion, up 3%, reflecting organic growth of 6%; Field up 3% with organic growth of 6%; Products up 2% with organic growth of 7%

- Field orders up 2% organically versus prior year; Backlog up 6% organically versus prior year

- Repurchased approximately 16 million shares in the quarter for $533 million

- Closed sale of Power Solutions business with net cash proceeds of approximately $11.6 billion

- Increased fiscal 2019 adjusted EPS from continuing operations guidance to $1.85 to $1.95, representing a year-over-year increase of 16% to 23%

CORK, Ireland, May 1, 2019 /PRNewswire/ -- Johnson Controls International plc (JCI) today reported fiscal second quarter 2019 GAAP earnings per share ("EPS") from continuing operations, including special items, of $0.26.  Excluding these items, adjusted EPS from continuing operations was $0.32, up 23% versus the prior year period (see attached footnotes for non-GAAP reconciliation).

Sales of $5.8 billion increased 3% compared to the prior year.  Excluding the impacts of M&A and foreign currency, sales grew 6% organically.     

GAAP earnings before interest and taxes ("EBIT") was $419 million and EBIT margin was 7.3%. Adjusted EBIT was $469 million and adjusted EBIT margin was 8.1%, up 60 basis points over the prior year.  Excluding the impact of M&A and foreign currency, the underlying adjusted EBIT margin increased 70 basis points.

On April 30, 2019, the Company closed the previously announced sale of the Power Solutions business to Brookfield Business Partners for net cash proceeds of approximately $11.6 billion.  As previously stated, net cash proceeds are expected to be used to reduce $3.4 billion in existing debt, and fund the repurchase of up to $8.2 billion in ordinary shares.  

Separately, in connection with the closing of the transaction, the Company announced today that it plans to launch a "modified Dutch auction" tender offer in the coming days for up to $4.0 billion of its ordinary shares with a price range between $36.00 and $40.00 per share. The Company also announced that it has commenced a cash tender offer to purchase up to $1.5 billion in aggregate principal amount of certain of its outstanding notes.  For additional information regarding the debt tender, please refer to the debt tender offer press release issued by the Company concurrently with this release.

"Johnson Controls delivered another strong quarter, demonstrating continued organic top-line momentum and our commitment to operational execution," said George Oliver, chairman and CEO.  "Given the strength of our backlog, visibility into our order pipeline, and strategic initiatives to improve profitability, I am confident in our outlook for the second half.  Additionally, we closed the Power Solutions transaction ahead of schedule, which enables us to accelerate our efforts to return capital to shareholders." 

Income and EPS amounts attributable to Johnson Controls ordinary shareholders
($ millions, except per-share amounts)

The financial highlights presented in the tables below are in accordance with GAAP, unless otherwise indicated. All comparisons are to the fiscal second quarter of 2018.  The results of Power Solutions are reported as discontinued operations in all periods presented.

Organic sales growth, organic EBITA growth, adjusted segment EBITA, adjusted EBIT, adjusted EPS from continuing operations and adjusted free cash flow are non-GAAP financial measures. For a reconciliation of these non-GAAP measures and detail of the special items, refer to the attached footnotes.  A slide presentation to accompany the results can be found in the Investor Relations section of Johnson Controls' website at http://investors.johnsoncontrols.com.


GAAP

GAAP


Adjusted

Adjusted



Q2 2018

Q2 2019


Q2 2018

Q2 2019

Change

Sales

$5,630

$5,779


$5,630

$5,779

+3%

Segment EBITA

615

664


630

671

+7%

EBIT

361

419


425

469

+10%

Net income from

continuing operations

184

240


246

287

+17%

Diluted EPS from continuing operations

$0.20

$0.26


$0.26

$0.32

+23%

BUSINESS RESULTS

Building Solutions North America


GAAP

GAAP


Adjusted

Adjusted



Q2 2018

Q2 2019


Q2 2018

Q2 2019

Change

Sales

$2,097

$2,187


$2,097

$2,187

4%

Segment EBITA

$239

$257


$244

$259

6%

Segment EBITA margin %

11.4%

11.8%


11.6%

11.8%

20bps

Sales in the quarter of $2.2 billion increased 4% versus the prior year.  Excluding M&A and foreign currency, organic sales increased 5% versus the prior year driven by solid growth across HVAC & Controls and Fire & Security.        

Orders in the quarter, excluding M&A and adjusted for foreign currency, increased 2% year-over-year.  Backlog at the end of the quarter of $5.6 billion increased 5% year-over-year, excluding M&A and adjusted for foreign currency.

Adjusted segment EBITA was $259 million, up 6% versus the prior year. Adjusted segment EBITA margin of 11.8% expanded 20 basis points versus the prior year as favorable volume leverage as well as cost synergies and productivity savings, were partially offset by unfavorable mix and run-rate salesforce additions. 

Building Solutions EMEA/LA (Europe, Middle East, Africa/Latin America)


GAAP

GAAP


Adjusted

Adjusted



Q2 2018

Q2 2019


Q2 2018

Q2 2019

Change

Sales

$907

$878


$907

$878

(3%)

Segment EBITA

$77

$80


$78

$81

4%

Segment EBITA margin %

8.5%

9.1%


8.6%

9.2%

60bps

Sales in the quarter of $878 million declined 3% versus the prior year.  Excluding M&A and foreign currency, organic sales grew 4% versus the prior year driven by strong growth in service and project installation. Growth was positive across most regions, led by strength in Fire & Security and Industrial Refrigeration in Europe and Latin America.        

Orders in the quarter, excluding M&A and adjusted for foreign currency, increased 3% year-over-year.  Backlog at the end of the quarter of $1.7 billion increased 9% year-over-year, excluding M&A and adjusted for foreign currency.

Adjusted segment EBITA was $81 million, up 4% versus the prior year. Adjusted segment EBITA margin of 9.2% expanded 60 basis points over the prior year, including a 40 basis point headwind related to foreign currency.  Adjusting for foreign currency, the underlying margin improved 100 basis points driven by favorable volume, as well as the benefit from cost synergies and productivity savings, partially offset by run-rate salesforce additions. 

Building Solutions Asia Pacific


GAAP

GAAP


Adjusted

Adjusted



Q2 2018

Q2 2019


Q2 2018

Q2 2019

Change

Sales

$586

$628


$586

$628

7%

Segment EBITA

$71

$76


$71

$76

7%

Segment EBITA margin %

12.1%

12.1%


12.1%

12.1%

Flat

Sales in the quarter of $628 million increased 7% versus the prior year.  Excluding M&A and foreign currency, organic sales increased 12% versus the prior year driven primarily by double digit growth in project installations.        

Orders in the quarter, excluding M&A and adjusted for foreign currency, increased 1% year-over-year.  Backlog at the end of the quarter of $1.6 billion increased 8% year-over-year, excluding M&A and adjusted for foreign currency.

Adjusted segment EBITA was $76 million, up 7% versus the prior year. Adjusted segment EBITA margin of 12.1% was unchanged versus the prior year as favorable volume was more than offset by unfavorable mix, run-rate salesforce additions and expected underlying margin pressure.    

Global Products


GAAP

GAAP


Adjusted

Adjusted



Q2 2018

Q2 2019


Q2 2018

Q2 2019

Change

Sales

$2,040

$2,086


$2,040

$2,086

2%

Segment EBITA

$228

$251


$237

$255

8%

Segment EBITA margin %

11.2%

12.0%


11.6%

12.2%

60bps

Sales in the quarter of $2.1 billion increased 2% versus the prior year. Excluding M&A and foreign currency, organic sales increased 7% versus the prior year with low-double digit growth in Building Management Systems, mid-single digit growth in HVAC & Refrigeration Equipment, and low-double digit growth in Specialty Products.     

Adjusted segment EBITA was $255 million, up 8% versus the prior year. Adjusted segment EBITA margin of 12.2% expanded 60 basis points over the prior year. This increase was driven by favorable volume and mix, positive price/cost as well as the benefit of cost synergies and productivity savings, slightly offset by ongoing product investments. 

Corporate


GAAP

GAAP


Adjusted

Adjusted



Q2 2018

Q2 2019


Q2 2018

Q2 2019

Change

Corporate expense

($162)

($167)


($113)

($104)

(8%)

Adjusted Corporate expense was $104 million in the quarter, a decrease of 8% compared to the prior year, driven primarily by continued cost synergies and productivity savings. 

OTHER ITEMS

  • For the quarter, cash provided by operating activities from continuing operations was $0.2 billion and capital expenditures were $0.1 billion, resulting in free cash flow from continuing operations of $0.1 billion.  Adjusted free cash flow was $0.2 billion, which excludes net cash outflows of $0.1 billion primarily related to integration costs. 
  • Year-to-date, cash provided by operating activities from continuing operations was $0.1 billion and capital expenditures were $0.3 billion, resulting in a free cash outflow from continuing operations of $0.2 billion.  Adjusted free cash flow was neutral, which excludes net cash outflows of $0.2 billion primarily related to restructuring and integration costs. 
  • During the quarter, the Company repurchased approximately 16 million shares for $533 million.  Year-to-date, the Company repurchased approximately 30 million shares for $1 billion.
  • The Company is increasing its outlook for fiscal 2019 adjusted EPS before special items from continuing operations to a range of $1.85 to $1.95, representing a year-over-year increase of 16% to 23%.  The updated outlook reflects the incremental use of Power Solutions sale proceeds, which are now expected to result in an approximate $0.15 benefit versus a $0.05 benefit previously expected. 

About Johnson Controls:

Johnson Controls is a global leader creating a safe, comfortable and sustainable world. Our 105,000 employees create intelligent buildings, efficient energy solutions and integrated infrastructure that work seamlessly together to deliver on the promise of smart cities and communities in 150 countries. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. We are committed to helping our customers win everywhere, every day and creating greater value for all of our stakeholders through our strategic focus on buildings. For additional information, please visit http://www.johnsoncontrols.com or follow us @johnsoncontrols on Twitter.

Johnson Controls International plc Cautionary Statement Regarding Forward-Looking Statements

Johnson Controls International plc has made statements in this communication that are forward-looking and therefore are subject to risks and uncertainties. All statements in this document other than statements of historical fact are, or could be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In this communication, statements regarding Johnson Controls' future financial position, sales, costs, earnings, cash flows, other measures of results of operations, synergies and integration opportunities, capital expenditures and debt levels are forward-looking statements. Words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "should," "forecast," "project" or "plan" and terms of similar meaning are also generally intended to identify forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Johnson Controls cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond Johnson Controls' control, that could cause Johnson Controls' actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to: any delay or inability of Johnson Controls to realize the expected benefits and synergies of recent portfolio transactions such as the merger with Tyco and the spin-off of Adient, changes in tax laws (including but not limited to the recently enacted Tax Cuts and Jobs Act), regulations, rates, policies or interpretations, the loss of key senior management, the tax treatment of recent portfolio transactions, significant transaction costs and/or unknown liabilities associated with such transactions, the outcome of actual or potential litigation relating to such transactions, the risk that disruptions from recent transactions will harm Johnson Controls' business, the strength of the U.S. or other economies, changes to laws or policies governing foreign trade, including increased tariffs or trade restrictions, automotive vehicle production levels, mix and schedules, energy and commodity prices, the availability of raw materials and component products, currency rates and cancellation of or changes to commercial arrangements, and with respect to the disposition of the Power Solutions business, whether the strategic benefits of the Power Solutions transaction can be achieved. A detailed discussion of risks related to Johnson Controls' business is included in the section entitled "Risk Factors" in Johnson Controls' Annual Report on Form 10-K for the 2018 fiscal year filed with the SEC on November 20, 2018, which is available at www.sec.gov and www.johnsoncontrols.com under the "Investors" tab. Shareholders, potential investors and others should consider these factors in evaluating the forward-looking statements and should not place undue reliance on such statements. The forward-looking statements included in this communication are made only as of the date of this document, unless otherwise specified, and, except as required by law, Johnson Controls assumes no obligation, and disclaims any obligation, to update such statements to reflect events or circumstances occurring after the date of this communication.

Non-GAAP Financial Information

The Company's press release contains financial information regarding adjusted earnings per share, which is a non-GAAP performance measure. The adjusting items include net mark-to-market adjustments, transaction/integration costs, restructuring and impairment costs, Scott Safety gain on sale, the impact of ceasing the depreciation/amortization expense for the Power Solutions business as the business is held for sale and discrete tax items. Financial information regarding organic sales, adjusted segment EBITA, adjusted organic segment EBITA, adjusted segment EBITA margin, adjusted free cash flow and adjusted free cash flow conversion are also presented, which are non-GAAP performance measures. Adjusted segment EBITA excludes special items such as transaction/integration costs and Scott Safety gain on sale because these costs are not considered to be directly related to the underlying operating performance of its business units.  Management believes that, when considered together with unadjusted amounts, these non-GAAP measures are useful to investors in understanding period-over-period operating results and business trends of the Company. Management may also use these metrics as guides in forecasting, budgeting and long-term planning processes and for compensation purposes. These metrics should be considered in addition to, and not as replacements for, the most comparable GAAP measure.

Additional Information and Where to Find It

This news release is for informational purposes only, is not a recommendation to buy or sell any securities of Johnson Controls, and does not constitute an offer to buy or the solicitation to sell any securities of Johnson Controls.

The equity tender offer has not yet commenced, and there can be no assurances that Johnson Controls will commence the equity tender offer on the terms described in this new release or at all. On the commencement date of the equity tender offer, Johnson Controls will file a tender offer statement on Schedule TO, including an offer to purchase, letter of transmittal and related materials, with the SEC.  The equity tender offer will be made only pursuant to the offer to purchase, the related letter of transmittal and other related materials filed as part of the Schedule TO with the SEC upon commencement of the equity tender offer.  When available, shareholders should read carefully the offer to purchase, letter of transmittal and related materials because they will contain important information, including the various terms of, and conditions to, the equity tender offer. Once the equity tender offer is commenced, shareholders will be able to obtain a free copy of the tender offer statement on Schedule TO, the offer to purchase, letter of transmittal and other documents that Johnson Controls will be filing with the SEC at the SEC's website at www.sec.gov or from Johnson Control's information agent in connection with the equity tender offer.

Additionally, the debt tender offer described in this news release is being made solely on the terms and subject to the conditions set forth in the offering materials relating to the debt tender and the information in this press release is qualified by reference to such offering materials.

CONTACT:

Investors:

Antonella Franzen

(609) 720-4665




Ryan Edelman

(609) 720-4545




Media:

Fraser Engerman

(414) 524-2733

 

JOHNSON CONTROLS INTERNATIONAL PLC







CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share data; unaudited)















Three Months Ended March 31,



2019



2018







Net sales

$ 5,779



$ 5,630

Cost of sales

3,935



3,806


Gross profit

1,844



1,824







Selling, general and administrative expenses

(1,458)



(1,490)

Net financing charges

(98)



(107)

Equity income

33



27







Income from continuing operations before income taxes

321



254







Income tax provision

47



36







Income from continuing operations

274



218







Income from discontinued operations, net of tax

284



265







Net income

558



483








Less: Income from continuing operations attributable to noncontrolling interests

34



34








Less: Income from discontinued operations attributable to noncontrolling interests

9



11







Net income attributable to JCI

$    515



$    438







Income from continuing operations

$    240



$    184

Income from discontinued operations

275



254







Net income attributable to JCI

$    515



$    438







Diluted earnings per share from continuing operations

$   0.26



$   0.20

Diluted earnings per share from discontinued operations

0.30



0.27

Diluted earnings per share *

$   0.57



$   0.47







Diluted weighted average shares

905.9



932.5

Shares outstanding at period end

898.1



926.2







* May not sum due to rounding.






 

JOHNSON CONTROLS INTERNATIONAL PLC







CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share data; unaudited)















Six Months Ended March 31,



2019



2018







Net sales

$ 11,243



$ 10,935

Cost of sales

7,674



7,413


Gross profit

3,569



3,522







Selling, general and administrative expenses

(2,896)



(2,809)

Restructuring and impairment costs

-



(154)

Net financing charges

(183)



(209)

Equity income

75



74







Income from continuing operations before income taxes

565



424







Income tax provision

155



253







Income from continuing operations

410



171







Income from discontinued operations, net of tax

547



583







Net income 

957



754








Less: Income from continuing operations attributable to noncontrolling interests

63



62








Less: Income from discontinued operations attributable to noncontrolling interests

24



24













Net income attributable to JCI

$      870



$      668







Income from continuing operations

$      347



$      109

Income from discontinued operations

523



559







Net income attributable to JCI

$      870



$      668







Diluted earnings per share from continuing operations

$     0.38



$     0.12

Diluted earnings per share from discontinued operations

0.57



0.60

Diluted earnings per share 

$     0.95



$     0.72







Diluted weighted average shares

915.6



932.9

Shares outstanding at period end

898.1



926.2

 

JOHNSON CONTROLS INTERNATIONAL PLC








CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


(in millions; unaudited)
















March 31,


September 30,




2019


2018


ASSETS





Cash and cash equivalents

$      239


$              185


Accounts receivable - net

5,707


5,622


Inventories

2,124


1,819


Assets held for sale

2,999


3,015


Other current assets

1,767


1,182



Current assets

12,836


11,823








Property, plant and equipment - net

3,332


3,300


Goodwill


18,311


18,381


Other intangible assets - net

6,015


6,187


Investments in partially-owned affiliates

937


848


Noncurrent assets held for sale

5,229


5,188


Other noncurrent assets

1,829


3,070



Total assets

$ 48,489


$         48,797








LIABILITIES AND EQUITY





Short-term debt and current portion of long-term debt

$   3,968


$           1,307


Accounts payable and accrued expenses

4,214


4,428


Liabilities held for sale

1,558


1,791


Other current liabilities

3,701


3,724



Current liabilities

13,441


11,250








Long-term debt

8,418


9,623


Other noncurrent liabilities

5,144


5,259


Noncurrent liabilities held for sale

185


207


Shareholders' equity attributable to JCI

20,036


21,164


Noncontrolling interests

1,265


1,294



Total liabilities and equity

$ 48,489


$         48,797

 

JOHNSON CONTROLS INTERNATIONAL PLC











CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions; unaudited)



























Three Months Ended March 31,







2019



2018

Operating Activities





Net income attributable to JCI from continuing operations

$ 240



$  184

Income from continuing operations attributable to noncontrolling interests

34



34











Net income from continuing operations

274



218











Adjustments to reconcile net income from continuing operations to cash provided by operating activities:







Depreciation and amortization

211



212



Pension and postretirement benefit income

(28)



(36)



Pension and postretirement contributions

(16)



(13)



Equity in earnings of partially-owned affiliates, net of dividends received

(31)



(26)



Deferred income taxes

460



1



Other - net

5



11



Changes in assets and liabilities, excluding acquisitions and divestitures:









Accounts receivable

(285)



(97)





Inventories

(99)



(13)





Other assets

34



(37)





Restructuring reserves

(34)



(102)





Accounts payable and accrued liabilities

209



206





Accrued income taxes

(518)



(51)






Cash provided by operating activities from continuing operations

182



273











Investing Activities





Capital expenditures

(125)



(166)

Acquisition of businesses, net of cash acquired

-



(15)

Business divestitures, net of cash divested

-



103

Other - net

2



9






Cash used by investing activities from continuing operations

(123)



(69)











Financing Activities





Increase (decrease) in short and long-term debt - net

530



(488)

Stock repurchases

(533)



(49)

Payment of cash dividends

(239)



(241)

Proceeds from the exercise of stock options

38



20

Dividends paid to noncontrolling interests

(89)



(43)

Employee equity-based compensation withholdings

(2)



(12)






Cash used by financing activities from continuing operations

(295)



(813)











Discontinued Operations





Net cash provided by operating activities

309



391

Net cash used by investing activities

(87)



(107)

Net cash used by financing activities

(17)



(1)






Net cash flows provided by discontinued operations

205



283











Effect of exchange rate changes on cash, cash equivalents and restricted cash

5



44

Changes in cash held for sale

(28)



(5)

Decrease in cash, cash equivalents and restricted cash

$ (54)



$(287)

 

JOHNSON CONTROLS INTERNATIONAL PLC











CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions; unaudited)



























Six Months Ended March 31,







2019



2018

Operating Activities





Net income attributable to JCI from continuing operations

$   347



$   109

Income from continuing operations attributable to noncontrolling interests

63



62











Net income from continuing operations

410



171











Adjustments to reconcile net income from continuing operations to cash provided by operating activities:







Depreciation and amortization

422



422



Pension and postretirement benefit income

(57)



(72)



Pension and postretirement contributions

(37)



(36)



Equity in earnings of partially-owned affiliates, net of dividends received

(67)



(59)



Deferred income taxes

503



(79)



Non-cash restructuring and impairment costs

-



28



Gain on Scott Safety business divestiture

-



(114)



Other - net

33



38



Changes in assets and liabilities, excluding acquisitions and divestitures:









Accounts receivable

(139)



(107)





Inventories

(321)



(209)





Other assets

(29)



(174)





Restructuring reserves

(59)



(6)





Accounts payable and accrued liabilities

(17)



(53)





Accrued income taxes

(539)



390






Cash provided by operating activities from continuing operations

103



140











Investing Activities





Capital expenditures

(278)



(280)

Acquisition of businesses, net of cash acquired

(13)



(15)

Business divestitures, net of cash divested

6



2,114

Other - net

26



(8)






Cash provided (used) by investing activities from continuing operations

(259)



1,811











Financing Activities





Increase (decrease) in short and long-term debt - net

1,544



(1,544)

Stock repurchases

(1,000)



(199)

Payment of cash dividends

(479)



(473)

Dividends paid to noncontrolling interests

(132)



(43)

Proceeds from the exercise of stock options

51



36

Employee equity-based compensation withholdings

(23)



(36)

Other - net

-



(4)






Cash used by financing activities from continuing operations

(39)



(2,263)











Discontinued Operations





Net cash provided by operating activities

502



397

Net cash used by investing activities

(153)



(228)

Net cash provided (used) by financing activities

(28)



9






Net cash flows provided by discontinued operations

321



178











Effect of exchange rate changes on cash, cash equivalents and restricted cash

(38)



61

Changes in cash held for sale

(30)



5

Increase (decrease) in cash, cash equivalents and restricted cash

$     58



$   (68)


 

FOOTNOTES

 1.  Financial Summary































































The Company evaluates the performance of its business units primarily on segment earnings before interest, taxes and amortization (EBITA), which represents income from continuing operations before income taxes and noncontrolling interests, excluding general corporate expenses, intangible asset amortization, net financing charges, restructuring and impairment costs, and the net mark-to-market adjustments related to restricted asbestos investments and pension and postretirement plans. In the first quarter of fiscal 2019, the Company began reporting the Power Solutions business as a discontinued operation, which required retrospective application to previously reported financial information. As a result, the financial results shown below are for continuing operations and exclude the Power Solutions business.



































(in millions; unaudited)

Three Months Ended March 31,


Six Months Ended March 31,



















2019


2018


2019


2018



















Actual


Adjusted Non-GAAP


Actual


Adjusted Non-GAAP


Actual


Adjusted Non-GAAP


Actual


Adjusted Non-GAAP
















Net sales

































Building Solutions North America



$   2,187


$   2,187


$   2,097


$   2,097


$   4,303


$   4,303


$   4,109


$   4,109
















Building Solutions EMEA/LA



878


878


907


907


1,785


1,785


1,822


1,822
















Building Solutions Asia Pacific



628


628


586


586


1,241


1,241


1,183


1,183
















Global Products



2,086


2,086


2,040


2,040


3,914


3,914


3,821


3,821
















               Net sales



$   5,779


$   5,779


$   5,630


$   5,630


$ 11,243


$ 11,243


$ 10,935


$ 10,935

















































Segment EBITA (1)

































Building Solutions North America



$      257


$      259


$      239


$      244


$      507


$      512


$      466


$      480
















Building Solutions EMEA/LA



80


81


77


78


157


158


146


149
















Building Solutions Asia Pacific



76


76


71


71


142


142


145


145
















Global Products



251


255


228


237


441


449


514


415
















               Segment EBITA



664


671


615


630


1,247


1,261


1,271


1,189
















Corporate expenses (2)



(167)


(104)


(162)


(113)


(303)


(197)


(300)


(218)
















Amortization of intangible assets



(98)


(98)


(92)


(92)


(195)


(195)


(184)


(184)
















Net mark-to-market adjustments (3)



20


-


-


-


(1)


-


-


-
















Restructuring and impairment costs (4)



-


-


-


-


-


-


(154)


-
















               EBIT (5)



419


469


361


425


748


869


633


787
















               EBIT margin



7.3%


8.1%


6.4%


7.5%


6.7%


7.7%


5.8%


7.2%
















Net financing charges



(98)


(98)


(107)


(107)


(183)


(183)


(209)


(209)
















Income from continuing operations before income taxes


321


371


254


318


565


686


424


578
















Income tax provision (6)



(47)


(50)


(36)


(38)


(155)


(93)


(253)


(70)
















Income from continuing operations



274


321


218


280


410


593


171


508
















Income from continuing operations attributable to 

































     noncontrolling interests



(34)


(34)


(34)


(34)


(63)


(63)


(62)


(62)
















Net income from continuing operations attributable to JCI


$      240


$      287


$      184


$      246


$      347


$      530


$      109


$      446

















































(1) The Company's press release contains financial information regarding adjusted segment EBITA and adjusted segment EBITA margins, which are non-GAAP performance measures. The Company's definition of adjusted segment EBITA excludes special items because these costs are not considered to be directly related to the underlying operating performance of its businesses. Management believes these non-GAAP measures are useful to investors in understanding the ongoing operations and business trends of the Company. 



































The following is the three months ended March 31, 2019 and 2018 reconciliation of segment EBITA and segment EBITA margin as reported to adjusted segment EBITA and adjusted segment EBITA margin (unaudited):



































(in millions)

 Building Solutions
North America 


 Building Solutions
EMEA/LA 


 Building Solutions
Asia Pacific 


 Global Products 


 Consolidated
JCI plc 











2019


2018


2019


2018


2019


2018


2019


2018


2019


2018














Segment EBITA as reported

$     257


$      239


$        80


$        77


$        76


$        71


$      251


$      228


$      664


$      615














Segment EBITA margin as reported

11.8%


11.4%


9.1%


8.5%


12.1%


12.1%


12.0%


11.2%


11.5%


10.9%















































Adjusting items:

































  Integration costs

2


5


1


1


-


-


4


9


7


15















































Adjusted segment EBITA

$     259


$      244


$        81


$        78


$        76


$        71


$      255


$      237


$      671


$      630














Adjusted segment EBITA margin

11.8%


11.6%


9.2%


8.6%


12.1%


12.1%


12.2%


11.6%


11.6%


11.2%















































The following is the six months ended March 31, 2019 and 2018 reconciliation of segment EBITA and segment EBITA margin as reported to adjusted segment EBITA and adjusted segment EBITA margin (unaudited):



































(in millions)

 Building Solutions
North America 


 Building Solutions
EMEA/LA 


 Building Solutions
Asia Pacific 


 Global Products 


 Consolidated
JCI plc 















2019


2018


2019


2018


2019


2018


2019


2018


2019


2018














Segment EBITA as reported

$     507


$      466


$      157


$      146


$      142


$      145


$      441


$      514


$   1,247


$   1,271














Segment EBITA margin as reported

11.8%


11.3%


8.8%


8.0%


11.4%


12.3%


11.3%


13.5%


11.1%


11.6%















































Adjusting items:

































  Integration costs

5


14


1


3


-


-


8


15


14


32














  Scott Safety gain on sale

-


-


-


-


-


-


-


(114)


-


(114)















































Adjusted segment EBITA

$     512


$      480


$      158


$      149


$      142


$      145


$      449


$      415


$   1,261


null